UTICA, N.Y., Oct. 19 /PRNewswire/ -- CONMED Corporation (Nasdaq: CNMD)
today reported financial results for the third quarter and nine months ended
September 30, 2000.
Sales for the third quarter were $91.9 million compared to $91.7 million
in the same quarter last year. Net income was $2.7 million, or $0.18 per
diluted share. Net income in the third quarter of 1999 was $6.7 million, or
$0.43 per diluted share, excluding the effects of a non-recurring acquisition
related charge. After adding back non-cash amortization expenses, net income
was $5.4 million, or $0.35 per diluted share, compared to $9.2 million, or
$0.59 per diluted share in the same quarter in 1999.
For the nine months ended September 30, 2000, sales increased to
$290.8 million compared to $273.1 million in the same period last year. Net
income, excluding a nonrecurring charge, was $14.7 million, or $0.94 per
diluted share. Net income in the first nine months of 1999, excluding
non-recurring charges was $19.7 million, or $1.26 per diluted share. After
adding back non-cash amortization expense, net income was $22.6 million, or
$1.46 per diluted share, compared to $26.8 million, or $1.72 per diluted share
in the comparable nine month period last year.
During the second quarter, the Company incurred a nonrecurring severance
charge of $1.5 million in connection with a change from direct distribution to
non-stocking exclusive sales agent groups for certain geographic regions of
the United States. Including the charge, the Company reported net income of
$13.7 million, or $0.88 per diluted share, for the nine month period.
Sales in the Company's orthopedic businesses grew 7% to $60.7 million from
$56.5 million in the comparable quarter last year. Adjusted for constant
foreign currency exchange rates, the orthopedic sales growth would have been
8%. Arthroscopy sales, which represented approximately 55% of orthopedic
revenues, were $33.1 million compared to $33.6 million in the third quarter
last year. Sales in the powered surgical instruments business, which
represented approximately 45% of orthopedic revenues, grew 21% to
$27.6 million from $22.9 million in the same quarter in 1999. Non-orthopedic
sales were $31.2 million compared to $35.2 million in the third quarter last
year. As previously disclosed, the lower sales volumes in non-orthopedic
sales are primarily a result of increased competition and pricing pressure in
the surgical suction product line.
Joseph J. Corasanti, President and Chief Operating Officer, commented,
"Our results are consistent with our previously disclosed expectations for
the third quarter. Historically, the third quarter is our slowest period
as elective surgeries and international sales are lower in the summer months.
Our expectations for the fourth quarter remain strong with sales expected
to be in the $100 - $105 million range and earnings per share in the
$0.35 - $0.40 range."
Mr. Corasanti added, "We expect our 2001 sales growth will be internally
generated by a combination of factors, including new product introductions,
the continuation of strong international sales and the effects of the improved
domestic distribution of the Company's orthopedic products. Despite
forecasted flatness in our commodity businesses, we nevertheless expect our
total sales growth in 2001 to approximate 6% with earnings per share growing
15-20% over 2000 amounts. In year 2002 and beyond, we expect earnings per
share growth to exceed 20%."
CONMED is a medical technology company specializing in instruments and
implants for arthroscopic sports medicine and powered surgical instruments,
such as drills and saws, for orthopedic, ENT and neuro-surgery. The Company
is also a leading developer, manufacturer and supplier of advanced medical
devices, including RF electrosurgery systems used in all types of surgery, ECG
electrodes for heart monitoring and minimally invasive surgical devices.
Headquartered in Utica, New York, the Company's 2,400 employees distribute its
products worldwide from eight manufacturing locations.
This press release contains forward-looking statements based on certain
assumptions and contingencies that involve risks and uncertainties. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and relate to the
Company's performance on a going-forward basis. The forward-looking
statements in this press release involve risks and uncertainties which could
cause actual results, performance or trends, including the above mentioned
anticipated revenues and earnings, to differ materially from those expressed
in the forward-looking statements. The Company believes that all
forward-looking statements made by it have a reasonable basis, but there can
be no assurance that management's expectations, beliefs or projections as
expressed in the forward-looking statements will actually occur or prove to be
correct. In addition to general industry and economic conditions, factors
that could cause actual results to differ materially from those discussed in
the forward-looking statements in this press release include, but are not
limited to: (i) the failure of any one or more of the assumptions stated above
to prove to be correct; (ii) the risks relating to forward-looking statements
discussed in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999; (iii) cyclical purchasing patterns from customers,
end-users and dealers; (iv) timely release of new products, and acceptance of
such new products by the market;(v) the introduction of new products by
competitors and other competitive responses; and/or (vi) the Company's ability
to devise and execute strategies to respond to market conditions.
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(thousands except per share amounts)
Three months ended Nine months ended
September September
1999 2000 1999 2000
Net sales $91,712 $91,922 $273,064 $290,821
Cost and expenses:
Cost of
sales - Note A 45,036 44,136 131,403 140,124
Selling and
administrative
- Note B 26,659 30,579 79,775 92,798
Research and
development 3,035 4,109 8,833 11,087
Total
operating expenses
74,730 78,824 220,011 244,009
Income from operations 16,982 13,098 53,053 46,812
Interest expense, net (8,212) (8,834) (23,952) (25,477)
Income before
income taxes 8,770 4,264 29,101 21,335
Provision for
income taxes (3,157) (1,535) (10,476) (7,681)
Net income $5,613 $2,729 $18,625 $ 13,654
Per share data:
Net Income
Basic $.37 $.18 $1.22 $.89
Diluted .36 .18 1.19 .88
Weighted average common shares
Basic 15,276 15,324 15,228 15,307
Diluted 15,609 15,421 15,591 15,497
Note A - Cost of sales for the three and nine months ended September 1999
includes a non-recurring charge of approximately $1.6 million or
$.07 per diluted share related to the purchase accounting
valuation of inventory.
Note B - Selling and administrative expense for the nine months ended
September 2000 includes a one-time severance charge of
approximately $1.5 million or $0.06 per diluted share related to
the restructuring of the Company's arthroscopy sales force.
CONMED CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
ASSETS
(unaudited)
December September
1999 2000
Current assets:
Cash and cash equivalents $3,747 $3,308
Accounts receivable, net 76,413 75,423
Inventories 89,681 104,974
Income taxes receivable -- 4,113
Other current assets 6,876 7,447
Total current assets 176,717 195,265
Property, plant and equipment, net. 57,834 62,697
Goodwill and other assets, net 427,610 417,952
Total assets $662,161 $675,914
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 32,875 $ 35,270
Accrued interest 4,588 1,574
Other current liabilities 29,728 33,786
Total current liabilities 67,191 70,630
Long-term debt 361,794 353,709
Other long-term liabilities 21,915 26,609
Total liabilities 450,900 450,948
Shareholders' equity:
Capital accounts 127,128 127,576
Retained earnings 84,520 98,174
Accumulated other comprehensive income (387) (784)
Total equity 211,261 224,966
Total liabilities and shareholders' equity $662,161 $675,914
OTHER FINANCIAL INFORMATION
(unaudited, in thousands)
Three months ended Nine months ended
September September
1999 2000 1999 2000
EBITDA (excluding
non-recurring items) $24,894 $19,640 $72,548 $67,759
Depreciation 2,317 2,394 6,647 7,006
Amortization 3,974 4,148 11,227 12,432
Capital expenditures 2,102 4,053 5,894 11,869
SOURCE CONMED Corporation
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Company News On-Call:
http://www.prnewswire.com/comp/201850.html or fax,
800-758-5804, ext. 201850
CONTACT:
Robert Shallish, Chief Financial Officer of
CONMED Corporation, 315-797-8375; or Investors - Theresa Vogt or
Sarah Torres, or Media - Stacey Nield or Dan Budwick, all of
Morgen-Walke Associates, 212-850-5600, for CONMED Corporation
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